Changing long-term processes is never an easy thing to do but it’s especially challenging when you’re talking about how item labeling is done in Asia. Right now, for example, when the internet is down, workers take a “sneaker net” approach to getting purchase orders out: Someone plugs a USB drive into a computer, copies the information then walks down the hall and plugs it into another computer to remove the file and then brings it back to the packer, explains Chris Beukenkamp, managing director, Asia, for SPS Commerce. “We have the internet everywhere but you’re lucky if a factory has a single internet connection -- and that’s usually on a manager’s desk. It definitely won’t be on the factory floor where they’re doing packing and shipping.”
It’s an understatement when Beukenkamp says the process needs help so that everyone in the supply chain can be on the same page. But there are signs there may be changes made in the not-too-distant future. Now, he says, new RFID technologies are being promoted by a consortium of U.S.companies seeking to improve visibility into the retail supply chain and create operational efficiency by Item Level Tagging (ILT). The hope is that their Asian suppliers will participate in a common technology framework. A meeting was held in Hong Kong in August initiated by GS1 U.S., GS1 Hong Kong and a number of U.S.retailers, including Macy’s, Wal-Mart and JC Penney.
Specifically, the retailers are seeking POS data visibility; electronic proof of delivery – RFID data scanned when goods are delivered to the retailer that will be matched to the ASN and PO data; and facilitation of the invoicing/payment process. The value to the retailer is compliancy, enablement, scorecarding and inventory reduction, according to SPS Commerce. The suppliers will benefit, the consortium believes, by getting POS data visibility; ePOD (Proof of Delivery) since the RFID data scanned when goods are delivered to the retailer (POD) will be matched to the ASN andPOdata; and facilitation of invoicing and the payment process. Beukenkamp believes the proposal has merit, since the “factories do what the retailers say … or they’ll move to another factory.” Some retailers will subsidize the RFID technology, others will tell the factories to make it work.
Ultimately, though, the factories will likely figure out a way to charge retailers a little more and the retailer will pass that cost onto consumers, he says. But the proposal has merit. Technology is meant to make streamline processes and make them more efficient, make information more readily available to everyone in the supply chain, reduce waste, ship orders that are complete and on time, make your buyers happy and ultimately, save money and stay competitive. It’s time for factories in Asia to pay attention.